Tennessee Senate approves bill to strip cities of ability to annex by ordinance

State senators on Thursday overwhelmingly approved the most far-reaching change ever in Tennessee's nearly 60-year-old annexation laws, teeing up the bill for final passage next week on the House floor.

The Senate voted 27-1 for the bill by Sen. Bo Watson, R-Hixson, that eliminates cities' power to acquire new territory by ordinances, which critics deride as "forced annexation."

The House version, sponsored by Rep. Mike Carter, R-Ooltewah, is set for consideration Wednesday.

If the bill passes the House and is signed by Gov. Bill Haslam, cities could annex properties only with the owners' consent or by a public referendum vote.

That means city leaders will have to sell property owners and residents on the benefits of joining a municipality.

During Senate debate Thursday, Watson argued that it's only fair that property owners be allowed to consent or dissent to annexation. He rejected arguments by the Tennessee Municipal League and others that the bill would stymie municipal growth.

"Tennessee is one of three states that uses [annexation by ordinance]," he said. "But the 20 fastest-growing cities in the country do not have annexation by ordinance. [Repealing the power] is not an impediment to cities' growth. That is a false argument."

But, offering to become the "skunk at the garden party," Sen. Douglas Henry, D-Nashville, the longest-serving member of the Legislature, defended the present method.

"This bill hampers the progress of Tennessee cities to reach out as appropriate and take the necessary steps to bring people in," Henry said, even as he acknowledged "there are abuses."

Under the 1955 law, Tennessee cities can annex by ordinance, which requires three readings by a city's governing body; by mutual consent of property owners; and by public referendum.

Towns and cities usually choose to do so by ordinance, and it's often been a sore point in local municipalities.

In the mid-1970s, Chattanooga forcibly snatched enough outlying acreage to double its size, and unwilling residents protested for years thereafter that promised services were never delivered.

State lawmakers in 1998 passed an urban growth law ordering municipalities to outline where they expected to expand over the next 20 years.

That touched off a war over exact boundaries between towns and a lawsuit by Hamilton County leaders who wanted no part of the business.

And in his 2009 inauguration speech, then-Mayor Ron Littlefield outlined a vision of a Greater Chattanooga that involved massive annexations to the west and north involving 17 tracts.

It took until mid-2012 for the last lawsuits to be settled, and some neighborhoods in Hixson, Middle Valley and the Big Ridge area were only brought into the city at the end of 2013.

Outrage over the unwilling absorption also helped fuel a two-year court battle, ultimately unsuccessful, to have Littlefield recalled from office.

Chattanooga Mayor Andy Berke came into office last year. His spokeswoman, Lacie Stone, said Thursday that "if I understand the bill correctly, it only impacts planned future annexations, which we don't have. So what we are focused on is providing the very best services possible to our current citizens."

"The people should decide," he said. His own area was annexed in 1975, he said, and to this day -- nearly 40 years later -- still doesn't have all the services the city promised.

Under present law he said, "the cities of Tennessee don't have to work at it. When they need money, all they have to do is annex some more people."

Chattanooga Councilman Ken Smith, whose Hixson district fought Littlefield's annexation long and hard, also was happy with the vote.

"I have not been proponent of forced annexation for cities to grow," Smith said. "If, as a city, we will focus on providing essential services especially well, then people will want to be part of our city."

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Watson and Carter, a freshman lawmaker, pushed for repeal of annexation by ordinance last year, but had to settle for a one-year statewide moratorium that lasts until May 15. The bill would extend that to May 15, 2015, when annexation by ordinance simply would disappear from the state code.

Their effort also led to a study last year by the Tennessee Advisory Commission on Intergovernmental Relations of annexation issues and Tennessee's municipal land-growth policies.

TACIR has not issued final recommendations. If the bill becomes law, the moratorium would continue until it takes effect May 16, 2015.

That would allow TACIR to continue studying annexation and land-development issues and would address who actually gets to vote in the referendums.

Property owners include businesses and corporations and TACIR will tackle whether their owners should have a vote and similar thorny questions.

Carter said he is "cautiously optimistic" the annexation reform bill will pass the House.

A similar bill passed the House earlier this session -- it would have required a referendum vote after cities annexed by ordinance -- but the Senate chose the Watson/Carter bill with elements from the House-passed bill.

"The support was so overwhelming it gave Sen. Watson and myself the opportunity to create an amendment to strengthen both bills," Carter said. "I call it a combination of effort."

House Majority Leader Gerald McCormick, R-Chattanooga, said that assuming the Senate version is the "finished product ... I'm assuming it will pass."